Talisman Energy Inc. was downgraded to sector perform from outperform at RBC Capital Markets despite third-quarter results that were generally in line with analysts’ forecasts.

Analyst Greg Pardy also cut his price target on the stock to US$13 from US$14, telling clients that Talisman’s results were overshadowed by “tepid progress on asset dispositions and dampened hopes for a corporate split.”

On the bright side, he noted the international energy exploration and production company is committed to its $2-billion-to-$3-billion asset-disposition program by mid-2014. Talisman also signalled it will move ahead with the sale of its 12% stake in the OCENSA pipeline before year-end, a deal RBC expects will be worth as much as US$600-million.

The company reiterated its 2013 production and cash flow guidance, and remains focused on the Americas and Asia-Pacific.

“There is no change to our view that Talisman’s upstream portfolio remains resource rich but still in need of reshaping,” Mr. Pardy said.

He noted the company on its Q3 conference call candidly indicated it has assessed a corporate split with the help of external advisors. However, it concluded this would very difficult to execute at this juncture given concerns about its credit rating, tax leakage and legal matters.

“In our view, with a corporate split less likely — at least for now, despite Carl Icahn’s 7% stake in the company — Talisman’s risk-reward opportunity is less attractive,” the analyst said.

Added Phil Skolnick, analyst at Canaccord Genuity, said in a research note: “We believe a positive catalyst post the Q3 release and conference call could be further tweets from Mr. Icahn around potential activist moves.”